Emerging Middle Class Drives Growth of Russia’s Private Healthcare Industry


Russia’s emerging middle class is willing to spend more for better healthcare service, driving a flourishing private medical services industry in the country, bne Intellinews writes.

Citizens enjoy free universal medical care under the Russian constitution, but the system is less than ideal, driven by shortages of beds, equipment, and medicines, the news outlet writes. Corruption is rife as doctors are on the take to move people up the queue or get access to a complex treatment and patients are commonly asked to pay for their own medication when it should be free.

The expansion of private medical services in Russia began in two areas: private hospitals that cater to richer clients and foreigners, with the European Medical Centre being the pioneer and familiar to any expat living in Moscow. Pre-natal and maternity care has been the other rapid growth area; everyone is willing to pay a little extra for the best when it comes to a baby, bne Intellinews writes.

The leader in maternity care is the MD Medical Group (MDMG). It has been building hospitals all over the country to cater for the high demand for quality medical care during childbirth. Founded by Mark Kurtser, once Moscow’s chief gynaecologist, in 2003, it opened its flagship $150mn private maternity hospital in Moscow in 2006, the first of its kind in Russia. The company grew quickly and held an IPO in in 2012, raising $133 million to fund further expansion. It has been relatively unaffected by the slowing economy or U.S. sanctions on Russia since 2014.

This week, MDMG opened its sixth large-scale multidisciplinary hospital, located in the city of Tyumen. The facility is to serve the Tyumen region, as well as the Khanty-Mansiisk and Yamalo-Nenetsk autonomous areas, where the average monthly salary of around $1060, 60% higher than the Russian average. VTB Capital (VTBC) said in a note that the company is prominent with portfolio investors.

“The hospital has 10 operating theatres and the company sees surgeries accounting for 40% of targeted annual revenues of $38 million) with the rest coming from services for women and children,” says Maria Kolbina, an analyst with VTBC.